Debt Dumpers - 2016

[Eureka]

@QuirkyJules welcome! Feel free to jump in anytime! Especially if you have detailed knowledge.

Thanks to everyone for the well wishes. Dad had a checkup today after his round of chemo last week. He seems to be tolerating the chemo quite well, which is good. Quality of life issue, he decreed that if the chemo made him too sick or miserable he wouldn't continue it, but he only had a couple of days of just feeling a bit queasy. As to the checkup, his white blood count dropped from 89000 to about 25000. The doctor wants it in the 60000 to 8000 range, but an initial drop of that much was good news. If his next round or 2 go as well, the doctor said he may delay the round in December til after the holidays.

Hopefully he will continue to do well. One of my friends had seven rounds and each one made her feel sicker and less energetic than the one before. She ended up having a mastectomy, but the good news was it wiped out the nodules in her lungs and she has no active disease at the moment, so to her it was worth it.

 

[DisneyMandC]

Guys ya'll are smarter than me and I need help trying to understand student loans. I fill like such a dummy when it comes to them.

So here an actual break down of 1 of 2 accounts I have. I would like to do the Dave Ramsey snowball thing...but here's where I'm confused. See it's broken down into 4 different amounts.

Can I pay off the $321 first? I'm sure I'd have to call to do the payment but can I do that? Can I list these each as separate and start attacking them a little along. Do my regular monthly payment then snowball the rest into a specific smaller account? Does this make sense I confuse myself often

I agree with the above comments on attacking the unsubsidized loans first! Better to get those out of the way, especially with their interest rates. I have never applied extra to my student loans, but I've had friends who have and I believe they've had to call in order to direct where the payment should go. I remember someone telling me that when we were in law school, because she wanted to make sure the payment went to the principal and not the interest. Not 100% sure that worked, but that's what she told me she was doing. I know mine has an option to pay extra on the website, but like I said, since I haven't done it, I'm not sure how they distribute it.

Welcome, @QuirkyJules !

 

[DisneyMandC]

@QuirkyJules welcome! Feel free to jump in anytime! Especially if you have detailed knowledge.

Thanks to everyone for the well wishes. Dad had a checkup today after his round of chemo last week. He seems to be tolerating the chemo quite well, which is good. Quality of life issue, he decreed that if the chemo made him too sick or miserable he wouldn't continue it, but he only had a couple of days of just feeling a bit queasy. As to the checkup, his white blood count dropped from 89000 to about 25000. The doctor wants it in the 60000 to 8000 range, but an initial drop of that much was good news. If his next round or 2 go as well, the doctor said he may delay the round in December til after the holidays.

That's great! One of my best friends had cancer (she's beaten it twice now!) and I know that three days exactly after each chemo treatment, she would be sick. That would last about 2 days, and then she'd be back to normal, just with a little bit of "chemo brain" as she called it (fuzzy memory, "blonde moments", etc.).

My cousin had a particularly rare type of leukemia as well about 15 years ago. It was tough, but he beat it and has been cancer-free ever since. Praying for the same for your dad!

 

[MrsTurnerLovesDisney]

Thank you all for the replies. I'm going to sit down today and try to really study it. I kept saying "Oh we don't really have debt just student loans & a truck note...not like some people with like furniture loans and all."

Well I sat down yesterday and between truck note 3 student loans a small credit card balance and the loan we took from DH grandpa to build our porch this summer we have roughly $60k in debt. Which I know isn't a lot compared to some but when you have very little extra income that's terrible. So going to come up with a plan of attack and will report back on my findings.

 

[LibOzZoHam]

In regards to student loans--I've got somewhere north of $60k, all federal loans, and I work in nonprofit, so they will be forgiven after 10 years (63 more months!). Having my son brought my payment (originally $800/mo) down to $16/month. It pays NOTHING on my interest, but as long as I keep paying that $16, it counts as a payment and goes towards my loan forgiveness. I keep telling people that having a baby was the best and worst thing we did for our finances!

 

[DisneyMandC]

In regards to student loans--I've got somewhere north of $60k, all federal loans, and I work in nonprofit, so they will be forgiven after 10 years (63 more months!). Having my son brought my payment (originally $800/mo) down to $16/month. It pays NOTHING on my interest, but as long as I keep paying that $16, it counts as a payment and goes towards my loan forgiveness. I keep telling people that having a baby was the best and worst thing we did for our finances!

Yup. Truthfully, I feel like I'm cheating the system. But every loan advisor I've ever talked to has told me to pay the lowest amount possible if I'm doing PSLF, so that's what I'm doing. Crazy stuff.

 

[Eureka]

Today was the other interview. I liked this place too and felt a little more comfortable with the subject matter than I did with the place last week. The people were nice but seemed more reserved than the people last week. This place is closer to my house (either one would be quite a drive in rush hour but this one is closer), is a small nonprofit and a little more formal than I expected. The CEO is retired military and dress code is business dress except for business casual (but no jeans - not a problem for me) on Fridays. If I worked here I would need to buy a few more skirts, blouses, and dress pants. This is round one of interviews and I won't know for a couple of weeks if I make it to round two. There are three rounds. I'd be surprised if I don't get to round two bc they mentioned several times how strong my skills and background is.

Then I got an email from the first place. We had talked about my job search in general terms (told her I had interviews scheduled) and they have completed their interviews and wanted to know if I am still interested bc they are "very interested" in me. I was happy to hear this bc I thought I had not done very well on the writing test bc of the subject matter, but obviously if they were contacting me, I must have done fine. I said yes, I am still interested. This place is farther away and the level of knowledge that I perceive I'd need makes me a little nervous, but the manager was so nice and friendly that in the interview I could immediately see myself working for her. It's a bigger company, but that's fine either way. I've done big and I've done small. I could tell from the way the manager and the HR person were dressed that it's more business casual like my old job was, and my current wardrobe with a mix of dress pants and "docker-type" pants and nice tops would be fine.

So while I have no offers, sounds like both are interested...I just wonder how the timing will work out. So now I wait and stress out, keep applying for jobs bc there are no guarantees. And eat ice cream. Lol.

 

[QuirkyJules]

Yup. Truthfully, I feel like I'm cheating the system. But every loan advisor I've ever talked to has told me to pay the lowest amount possible if I'm doing PSLF, so that's what I'm doing. Crazy stuff.

I think when that is an option available to you, it is absolutely fantastic to take advantage of it - don't feel like you are cheating the system because it IS the system! I did not see myself in a job that qualifies as public service for 10 years, so I targeted repayment as cost-effectively as possible from day one and done pretty well (though my husband definitely wishes I would relax about this).

I have often wondered for people who are taking advantage of the loan forgiveness opportunity, though, whether they are setting aside some money for the taxes on the forgiven amount. Is that something they (e.g., loan advisors, accountants, etc.) go over with you when you make that plan? I know some of my classmates from school will be in this position and some of them seem to be planning for it and some of them not so much. If anyone cares to share about that, I'd have to say I'm curious.

Either way, if you are going to get the loan forgiven, it does make financial sense to pay as little as possible in the meantime.

For me, this kind of highlights the individuality of debt repayment - a lot of it depends on everything from available resources to priorities to opportunity to behavior. And the "best" answer for one person is not the "best" for another. It's even hard for me to find the "best" answer for me AND my husband because we are not entirely in sync about priorities! Some people can pay off a huge pile of debt on very little income (requires a TON of self-discipline and dedication), and others have a relatively huge income but still struggle to make any headway.

My goal to reduce clutter around my house is similar to my goal to reduce debt. I try to imagine the value of the end effect. In the case of clutter, it's thinking to myself "what is the value of having this space cleared out?" And by that, I mean I think of the difference in cost to buy or rent a house that doesn't have that space (e.g., the same house but without a garage), but ALSO the effect on my sanity to alleviate some of the "stuff". In the case of debt, it's the things my family could DO with the money if it weren't paying back for things we've already done. Sometimes that helps me achieve a better mindset towards reaching my goals of becoming debt (and clutter) free!

 

[DisneyMandC]

I have often wondered for people who are taking advantage of the loan forgiveness opportunity, though, whether they are setting aside some money for the taxes on the forgiven amount. Is that something they (e.g., loan advisors, accountants, etc.) go over with you when you make that plan? I know some of my classmates from school will be in this position and some of them seem to be planning for it and some of them not so much. If anyone cares to share about that, I'd have to say I'm curious.

You are NOT taxed on the amount forgiven under public service loan forgiveness or student loan forgiveness for teachers! The only time you are taxed on the amount forgiven is if you pay for 20 or 25 years without paying your debt off and have an amount leftover.

 

[QuirkyJules]

You are NOT taxed on the amount forgiven under public service loan forgiveness or student loan forgiveness for teachers! The only time you are taxed on the amount forgiven is if you pay for 20 or 25 years without paying your debt off and have an amount leftover.

omg! That's even more awesome! Thanks for clarifying that - I thought there was always a tax bill on forgiven loans, but I stand corrected.

 

[Gena001]

So I received an update on DS, almost all good. I have to redo my budget, again though.

DS had another odd EKG so we will continue treatment as is until we know more. His genetic testing was negative, which is good, but also isn't 100% conclusive. This syndrome is not widely known or diagnosed so it's my understanding because it didn't show up doesn't mean he has it and it doesn't mean he doesn't have it...so still a guessing game currently. I do know he will need another loop recorder implanted when this current one dies...well when the battery dies. So I am hoping it happens this year since his deductible is met and I will only owe 10% but if not I will make sure to save enough in my FSA next year to cover all expenses. So yeah, another surgery but thankfully it's a minor surgery but still surgery.

We do have an option to travel to St. Louis to go see the doc that discovered this syndrome but I think I will wait and save that trip for later, if we ever get a diagnosis, or a non-diagnosis.


Thanks for listening!

Where is the doctor in St. Louis??? Through Barnes /Jewish Hopsital / Washington University???

 

[DisneyMandC]

omg! That's even more awesome! Thanks for clarifying that - I thought there was always a tax bill on forgiven loans, but I stand corrected.

I double checked the official government student loan website after your post and that's what it says! I think if I did the extended plan (not income-based) I would have something like $170k to be forgiven after 25 years that would be taxable. I don't even know how much you'd have to set aside for that amount. I mean, I guess you'd just get on a payment plan with the IRS and pay until you die?

 

[Gena001]

@dayvewc I'm sad to hear your news about your dad. Sending you prayers, hugs and pixie dust.

As for the dryer, this happened to us a couple years ago... hubby purchased a dryer element from a supply store (very cheap) and installed it himself. So, if you can't do the work, I think it's still cheaper than purchasing a new dryer.

How is the car doing after the repairs?

 

[QuirkyJules]

I double checked the official government student loan website after your post and that's what it says! I think if I did the extended plan (not income-based) I would have something like $170k to be forgiven after 25 years that would be taxable. I don't even know how much you'd have to set aside for that amount. I mean, I guess you'd just get on a payment plan with the IRS and pay until you die?

Yowza! I guess you'd pay tax in accordance with your income tax bracket, but even at only 10%, you'd have to come up with $17,000 to pay your tax bill!?! Pay until you die indeed!!!

PSLF for the win!! Glad to know how that option works. I'm really glad it's there for people that go into teaching and public service jobs, and I always like knowing about options that are available!


And totally changing topics here, but I know that one of the debt reduction ideas is to find a way to earn a little extra money on the side. I don't really have time to make art or crafts to sell (I swear, it's the time, not the lack of talent! Ha!), and although I do try to sell extra junk/stuff around the house on Craigslist or Letgo, there's only so much I'm ready to part with - and it's a limited resource. I tried to think of something I had that is an asset but isn't being utilized and.....we have a guest bedroom that doesn't see all that many family visitors, so I decided to start listing it on airbnb (am I allowed to mention business names?) and I've had a pretty good experience with it. Has anyone else here thought about doing this? I haven't found it to contribute significantly to reducing debt, but I've met some interesting people and the income does help with keeping a little buffer in my checking account or (and this is the dangerous part) makes me feel less guilty if I spend a little money on something maybe I didn't really need. I'm still figuring out the tax implications and wouldn't mind connecting with people who are also facing this for next tax year. I know there are forums specifically for that business, but somehow I don't think people are as supportive and friendly as y'all are on here!

 

[PrincessKymm]

Where is the doctor in St. Louis??? Through Barnes /Jewish Hopsital / Washington University???

I believe he is with University. Not 100% sure he is still there but that's where he found the first case.

 

[bcwife76]

@Eureka crossing my fingers for your job hunt, sounds very promising!

 

[momtosam]

My car's brake lines were repaired today to the tune of $630

Back to debt dumping next week, I guess.

 

[Eureka]

Guess who accepted a verbal offer of a job yesterday evening?! It was the first one I interviewed with, the one that's a little farther away (the commute is gonna suck) but with the manager who made me feel very comfortable. The HR lady, who previously had told me their range was lower than my previous salary, offered me slightly more than I was making when I was laid off (like, $1000 more) so I won't be taking a pay cut! This place has free parking and kicks in 10% for retirement once I qualify after three months being there. So happy and relieved. I know it didn't take very long at all but it's been a long summer of stress. Not sure when I start, depends on background check.

 

[Eureka]

My car's brake lines were repaired today to the tune of $630

Back to debt dumping next week, I guess.

Ugh. Cars are such a pain. Our van has automatic doors and one of them is broken, there's a cord hanging down that's loose or detached. It will start to open and then stops. Luckily we can pull it shut manually. Not sure we will even fix it bc the car is old and recently has started falling apart. I think we're done paying on our other car in maybe six months (can't remember)...then we'll start looking for a new van. Only want one payment at a time.

 

[ruadisneyfan2]

Guess who accepted a verbal offer of a job yesterday evening?! It was the first one I interviewed with, the one that's a little farther away (the commute is gonna suck) but with the manager who made me feel very comfortable. The HR lady, who previously had told me their range was lower than my previous salary, offered me slightly more than I was making when I was laid off (like, $1000 more) so I won't be taking a pay cut! This place has free parking and kicks in 10% for retirement once I qualify after three months being there. So happy and relieved. I know it didn't take very long at all but it's been a long summer of stress. Not sure when I start, depends on background check.

Woo hoo!